PARMANAND PATEL (D) BY LR. & ORS. versus SUDHA A. CHOWGULE & ORS.

Citation: [2009] 4 S.C.R. 172 · Decided: 06-03-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Disposed off

Judgment (excerpt)

[2009] 4 S. C.R. 172 
A 
PARMANAND PATEL (D) BY LR. & ORS. 
V. 
SUDHA A. CHOWGULE & ORS. 
Civil Appeal No. 1574 of 2009 
B 
MARCH 6, 2009 
[S. B. SINHA AND CYRIAC JOSEPH, JJ.] 
Code of Civil Procedure, 1908 - 0. 40 r. 1 - Receiver -
When to be appointed - Held: Is only when it is found to be 
;ust and convenient to do so - Appointment of receiver during 
C pendency of suit is within the disr.retion of the cowt - Ordinarily 
receiver would not be appointed except on a prima facie finding 
that plaintiff has excellent chance of success in the suit -
Plaintiff has to show a case of adverse and conflict claims of 
property but also emergency, danger or loss demanding 
D immediate action - Also it cannot be appointed unless case 
is made out depriving defendant of de facto possession - On 
facts, interim order by High Court appointing Official Receiver 
for assets of Company of testator, with certain directions not 
interfered with - However, order as regard giving exclusive 
E powers to the beneficiary of the Will to execute documents 
and also to induct tenants, not justified in view of the 
relationship between the parties. 
Appellant no 1 is a testator. Appellant no. 2 is his 
widow and respondent nos.1 and 2 are his daughters. 
F Appellant no 1 executed a Will and also prepared letters 
of gifts in respect of his properties. 
In this appeal, the interim order passed by the 
Division Bench of High Court that the Receiver of High 
G Court is appointed as Receiver for the assets of the 
company; that respondent no.1 would act as an Agent of 
the Receiver and render necessary information to the 
Chartered Accountant; that respondent no. 1 would 
operate the bank account singly; and that respondent no. 
H 
172 
PARMANAND PATEL (D) BY L.R. & ORS. V. 
173 
SUDHA A. CHOWGULE & ORS. 
1 would execute documents and also induct tenants, is A 
under challenge. 
Disposing of the appeals, the Court 
HELD : 1.1 A receiver having regard to the provisions 
contained in 0.40 r. 1 of the Code of Civil Procedure is 
B 
appointed only when it is found to be just and convenient 
to do so.Appointment of a receiver pending suit is a matter 
which is within the discretionary jurisdiction of the Court. 
Ordinarily the Court would not appoint a receiver save 
and except on a prima facie finding that the plaintiff has c 
an excellent chance of success in the suit. It is also for 
the plaintiff not only to show a case of adverse and conflict 
claims of property but also emergency, danger or loss 
demanding immediate action. Element of danger is an 
important consideration. Ordinarily, a receiver would not D 
be appointed unless a case has been made out which 
• 
may deprive the defendant of a de facto possession. For 
the said purpose, conduct of the parties would also be 
relevant. [Para 15] [190-A-D] 
1.2 1st respondent did not question that part of the 
E 
order of the Division Bench whereby an Official Receiver 
of the High Court has been appointed as receiver in 
respect of the suit properties. Thus, a strong prima facie 
• 
case has been found in favour of the appellants. Parties 
have brought out medical reports in respect of late P F 
which gives different pictures about his mental condition 
at the relevant time. The relevant date for determining the 
mental faculty of late P would be 23rd January 2005 when 
the Will was executed, but for arriving at the said 
conclusion his mental condition, both prior thereto and G 
later, would be relevant. Prima facie, appellant no.2 was 
~ 
compelled to file a suit in order to protect the interest of 
her husband. Suit was entertained and interim order was 
passed. The Division Bench in order to satisfy itself, called 
late P in their chamber. He was found to be totally H 
174 
SUPREME COURT REPORTS 
[2009] 4 S.C.R. 
A confused and incoherent. In the said situation, a panel of 
doctors was constituted for examining him and the said 
report of the said panel of doctors is considered. [Para 
16] [190-D-H; 191-A] 
1.3 The property in suit is worth more than Rs.1000 
8 crores. There are several companies. Respondent no.5-
company own huge properties. There are two multi-
storeyed buildings which are occupied by a large number 
of tenants. Each of the heirs and legal representatives of 
late Pin the event he is found to have died intestate, would 
C have 1/3rd share. Appellant no.2 does not claim exclusive 
interest in respect of the flats purported to have been gifted 
in her favour by her late husband.

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